The Perils of GMO Labeling

April 6, 2022

Summary by MSI Executive Director John Lynch

GMO labeling laws around the world vary widely. Some countries have voluntary “non-GMO” labels, and others require “contains GMO” labels. The laws were passed decades ago when regulators were concerned about safety risks. However, in the last two decades, a scientific consensus has formed that GMO foods are safe. In 2016, in response to anti-GMO activists’ calls for mandatory GMO labels, 107 Nobel Prize winners wrote “Scientific and regulatory agencies around the world have repeatedly and consistently found crops and foods improved through biotechnology to be as safe as, if not safer than those derived from any other method of production.” At the same time, popular opinions about GMO foods remain negative, and anti-GMO activists have advocated for mandatory labels. Firms and regulators must navigate the case where consumers have beliefs and attitudes contrary to the scientific consensus.

The Kim, Kim, and Arora paper presented by Dr. Neeraj Arora finds that GMO labels persuade as much as they inform, shifting demand away from foods with GM ingredients compared to what demand would be for the same brands in a case of no GMO labels. These effects are more dramatic for mandatory “contains GMO” labels than for voluntary “no GMO labels.” Critically for policy makers, the shifts in demand are strongest for consumers who did not harbor anti-GMO attitudes. Those consumers are persuaded of GMO danger by the labels. GMO labels also allow non-GMO products to charge a higher price premium by making GMO and non-GMO products perceived to be less substitutable. Compared to voluntary GMO labels, mandatory GMO labels cause consumers to perceive food decisions to be more difficult, make them more reluctant to purchase in the category, and focus attention more on the GM aspect of food.

In the panel discussion that followed, Dr. Sydney Scott shared the state of social science research about consumers’ anti-GMO attitudes, particularly in Europe. Her research has shown that those expressing the most negative attitudes towards GMOs are those who score lowest on tests of general scientific literacy, and they report opposing GMOs even if there were not health and safety or environmental concerns. This research shows that anti-GMO attitudes are rooted in moral concerns related to an intuitive “naturalness” ideology. Consumers see foods as less natural when there is any tampering with a product; adding sugar to tomato paste or subtracting lactose from milk renders the product less natural and less desirable even when there is no health benefit. If sugar were added to tomato paste and then that sugar was removed, the paste would be perceived as less natural than the original even though chemically identical to the original.

Dr. Sabrina Roberts shared the perspective of UK regulators now reconsidering GMO labeling laws in light of scientific feedback over the past two decades. They are exploring a twofold change in policy. First, they distinguish “Genetically Modified” and “Gene Edited” foods. Gene Edited refers to products that are genetically identical to what could have been produced by standard cross breeding, but that just happen to employ gene editing. The UK just completed a major survey of consumer perceptions of genome-edited food, with findings highly congruent with themes from Sydney Scott’s research. The UK is considering removing a requirement to label gene-edited foods. UK regulators are also sensitive to mistaken inferences that everyday consumers that GMO and GE foods are unsafe or that there is a health advantage of non-GMO foods. Regulators are considering coupling changes in labeling laws with consumer education about the functional properties of GMO foods. If consumers understand that there is no safety risk but still prefer non-GMO foods based on a moral or religious ideology, then the government required labels would be informing rather than persuading consumers and intervening in the market.

Dr. Sarah Moshary provided an academic perspective on food marketers’ likely response to any changes in required GM food labeling. The major thrust was that if required food labels imply to consumers that a product is undesirable, manufacturers will respond by changing their products to avoid the negative label. Dr. Moshary has studied the analogous case of changes in Chilean food labeling requirements to flag sugar content in cereals above a certain level. Firms responded by reformulating their products so that they would not have to attach a negative label—resulting in most reducing their sugar content just below the threshold for required labeling. By extension, one might expect food marketers to respond to GMO labeling requirements by reducing efforts to sell GMO foods. This seems consistent with what has occurred in the UK, where the passage of mandatory labeling laws has driven out domestic production of GMO foods. Dr. Moshary also highlighted that the finding from Dr. Arora’s paper that GMO labels capture attention and make choice more difficult. She noted that attention attracted to one product feature – GMOs here — takes scarce attention from other product information.

Dr. Maha Tahiri provided the perspective of an industry expert. She has worked with both large food marketers who sell GM products and small natural foods entrepreneurs making a business with non-GMO food products. We asked her how she thought food marketers would respond to the adoption of the new FDA “Bioengineered” label and how should they respond. Her observation was firms should do their research to understand how consumers are affected by these labels on their own products. Marketers often overestimate how much consumers might pay attention to labels, and that the research in the Arora paper focused attention on the labels in a way that might not be present in everyday shopping. But Dr. Tahiri noted that the deeper concern of those selling GM food products would be that the change in labeling laws might be just the first salvo of government discrimination against their products. Using the analogy of sugar labeling in foods, firms might fear a new label requirement presaged increased taxes for labeled products. Dr. Tahiri also noted the business opportunity in catering to the tastes of those who believe in the superiority of non-GMO foods.

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